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How Election Politics Could Shape The Biden Administration’s Weapons Spending – Forbes

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I frequently am called upon to address defense-industry audiences—offsites, board meetings, etc.—about the outlook for weapons spending.

I always begin by reminding the assembled executives that their customer isn’t a military service or defense agency, it’s a political system.

That is a market reality worth bearing in mind as the Biden administration puts together its military spending plans for the next three years.

There is a widespread belief that the administration’s 2022 defense request was just a placeholder until it gets sorted out, and that big changes are coming in 2023 when key appointees are in place and defense reviews have been completed.

However, there are compelling electoral reasons why Biden’s defense posture, especially his approach to weapons purchases, may continue to resemble the Trump priorities he inherited.

All you have to do is look at the razor-thin majorities Democrats command in Congress to see why changes in major programs could portend doom for their control of the government.

In the House, the loss of four votes would prevent Democrats from securing a majority for their agenda; in the Senate, the loss of even one vote could prove fatal.

So, if the pattern of midterm elections under recent Democratic presidents repeats next year, with sizable losses in both chambers, Biden could find his party severely weakened as it prepares for the next presidential contest in 2024.

The reason weapons spending may prove pivotal in next year’s midterms and beyond is that military outlays are by far the largest pot of discretionary spending that any administration controls, and weapons accounts are more subject to sudden shifts than, say, readiness.

For instance, Caspar Weinberger funded huge increases in weapons outlays during his time as Ronald Reagan’s defense secretary in the 1980s.

Only a decade later, after the Cold War ended, defense secretary Dick Cheney canceled a hundred major weapons programs during his four-year run in the same job.

Thus, it seems that among the various discretionary accounts that an administration can leverage to secure political support, weapons outlays deliver the greatest potential for influencing votes.

The Biden administration knows this, and probably will review any changes proposed by the Pentagon in its weapons accounts in light of the likely political fallout.

For example, the Navy has been talking about ending production of its Arleigh Burke-class destroyers in order to pursue a bigger warship.

Any such move would inevitably result in thousands of layoffs at Bath Iron Works, the biggest industrial employer in Maine.

If you doubt that the potential electoral consequences of mass layoffs at Bath will figure in administration defense plans, then you don’t understand how Washington works.

Against that backdrop, here are four states with sizable defense-industry workforces that are up for grabs in the next presidential election—states that went for Biden in 2020 but could easily go the other way in 2024.

The Biden White House will have to consider what any bold plans for shifting Pentagon investment priorities might mean for the vote in these states.

Arizona. Biden won Arizona’s 11 Electoral College votes with 49.4% of the ballots cast, compared to 49.0% for Donald Trump. It doesn’t get much closer than that.

The state’s 5,000+ defense contractors benefit handsomely from weapons spending, having received nearly $13 billion in Pentagon contracts during 2020. Raytheon’s missile business is one of the biggest employers in the state, and fellow aerospace contractor Honeywell also employs thousands.

It wouldn’t take much to shift Biden’s 11,000-vote margin in Arizona to a Republican candidate in 2024—Obama lost the state in both elections—nor to flip marginal congressional districts in 2022. Thus, the impact of weapons initiatives on local jobs will have to be assessed if the White House wants to avoid an electoral backlash.

Florida. The Sunshine State is arguably the biggest prize in presidential politics, since the two states with larger populations—California and Texas—are considered to be safely in the pocket of one or the other party. Trump won Florida last year with 51.2% of the vote to Biden’s 47.9%, but the previous two presidential races were won in the state by barely 1%.

So it probably has electoral implications that this particular battleground state has 16,000 defense contractors and last year received over $16 billion in Pentagon contracts. In fact, since 2000 Florida has received a quarter-trillion dollars in military contracts, much of it related to weapons work.

Unlike in Arizona, the Florida defense complex is spread out statewide among many prime contractors, from BAE Systems in the Panhandle to Northrop Grumman

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in Melbourne to Raytheon in St. Petersburg to Sikorsky in West Palm Beach. Any generalized reduction in Pentagon weapons outlays would inevitably destroy jobs across the state.

Pennsylvania. The Keystone State didn’t favor a Republican presidential candidate after Ronald Reagan left office until Donald Trump appeared on the ballot in 2016. Trump beat Clinton by 44,000 votes that year and lost by barely 1% four years later (48.8% to Biden’s 50.0%).

Close presidential races tend to be the rule in the nation’s fifth-most-populous state, which implies that relatively minor developments can have outsized consequences for Pennsylvania’s 18 Electoral College votes. How the Pentagon treats the state’s 11,000 military contractors might prove significant in a close race.

Like Florida, Pennsylvania’s defense complex is spread out, with only a handful of really big operations like the BAE Systems armored-vehicle plant in York and the Boeing

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rotorcraft plant near Philadelphia. But many of the small and medium-size suppliers are subcontractors on big-ticket weapons programs like the F-35 fighter, so a few program changes could have employment implications across the state.

Wisconsin. The Almanac of American Politics predicted in 2018 that Wisconsin might prove “the most pivotal battleground contest for Trump’s reelection bid,” acknowledging that a repetition of Trump’s 2016 win in the Badger State was by no means assured. As it turned out, Biden won with 49.4% of the vote in the state to 48.8% for Trump—a difference of 21,000 votes out of over three million cast.

Time will tell whether Wisconsin has returned to its long tradition of favoring Democratic presidential candidates. But Democrats will have to assume the worst in 2024, and thus strain to secure every available vote. That makes the state’s 4,000 defense contractors potentially important, even though on a per capita basis Wisconsin only brings in a fraction of the defense dollars that, for instance, Arizona does.

The biggest in-state prime contractors are Marinette Marine, which last year was awarded the Navy’s next frigate, and Oshkosh Defense, builder of almost all the Army’s trucks. Trump sought to capitalize on the frigate award in the 2020 election, and given its importance to the local economy Biden is unlikely to change course. Oshkosh has performed well on the Army’s newest light truck, which makes it easy for the White House to keep that effort on track.

Bottom line: weapons spending is only one component of federal spending, but in the battleground states where political control is ultimately determined, it has the potential to be decisive.

Several of the companies mentioned here contribute to my think tank.

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Alberta Premier Smith aims to help fund private school construction

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EDMONTON – Alberta Premier Danielle Smith says her government’s $8.6-billion plan to fast-track building new schools will include a pilot project to incentivize private ones.

Smith said the ultimate goal is to create thousands of new spaces for an exploding number of new students at a reduced cost to taxpayers.

“We want to put all of the different school options on the same level playing field,” Smith told a news conference in Calgary Wednesday.

Smith did not offer details about how much private school construction costs might be incentivized, but said she wants to see what independent schools might pitch.

“We’re putting it out there as a pilot to see if there is any interest in partnering on the same basis that we’ll be building the other schools with the different (public) school boards,” she said.

Smith made the announcement a day after she announced the multibillion-dollar school build to address soaring numbers of new students.

By quadrupling the current school construction budget to $8.6 billion, the province aims to offer up 30 new schools each year, adding 50,000 new student spaces within three years.

The government also wants to build or expand five charter school buildings per year, starting in next year’s budget, adding 12,500 spaces within four years.

Currently, non-profit independent schools can get some grants worth about 70 per cent of what students in public schools receive per student from the province.

However, those grants don’t cover major construction costs.

John Jagersma, executive director of the Association of Independent Schools and Colleges of Alberta, said he’s interested in having conversations with the government about incentives.

He said the province has never directly funded major capital costs for their facilities before, and said he doesn’t think the association has ever asked for full capital funding.

He said community or religious groups traditionally cover those costs, but they can help take the pressure off the public or separate systems.

“We think we can do our part,” Jagersma said.

Dennis MacNeil, head of the Public School Boards Association of Alberta, said they welcome the new funding, but said money for private school builds would set a precedent that could ultimately hurt the public system.

“We believe that the first school in any community should be a public school, because only public schools accept all kids that come through their doors and provide programming for them,” he said.

Jason Schilling, president of the Alberta Teachers’ Association, said if public dollars are going to be spent on building private schools, then students in the public system should be able to equitably access those schools.

“No other province spends as much money on private schools as Alberta does, and it’s at the detriment of public schools, where over 90 per cent of students go to school,” he said.

Schilling also said the province needs about 5,000 teachers now, but the government announcement didn’t offer a plan to train and hire thousands more over the next few years.

Alberta NDP Leader Naheed Nenshi on Tuesday praised the $8.6 billion as a “generational investment” in education, but said private schools have different mandates and the result could be schools not being built where they are needed most.

“Using that money to build public schools is more efficient, it’s smarter, it’s faster, and it will serve students better,” Nenshi said.

Education Minister Demetrios Nicolaides’ office declined to answer specific questions about the pilot project Wednesday, saying it’s still under development.

“Options and considerations for making capital more affordable for independent schools are being explored,” a spokesperson said. “Further information on this program will be forthcoming in the near future.”

This report by The Canadian Press was first published Sept. 18, 2024.

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Health Minister Mark Holland appeals to Senate not to amend pharmacare bill

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OTTAWA – Health Minister Mark Holland urged a committee of senators Wednesday not to tweak the pharmacare bill he carefully negotiated with the NDP earlier this year.

The bill would underpin a potential national, single-payer pharmacare program and allow the health minister to negotiate with provinces and territories to cover some diabetes and contraceptive medications.

It was the result of weeks of political negotiations with the New Democrats, who early this year threatened to pull out of their supply-and-confidence deal with the Liberals unless they could agree on the wording.

“Academics and experts have suggested amendments to this bill to most of us here, I think,” Independent Senator Rosemary Moodie told Holland at a meeting of the Senate’s social affairs committee.

Holland appeared before the committee as it considers the bill. He said he respects the role of the Senate, but that the pharmacare legislation is, in his view, “a little bit different.”

“It was balanced on a pinhead,” he told the committee.

“This is by far — and I’ve been involved in a lot of complex things — the most difficult bit of business I’ve ever been in. Every syllable, every word in this bill was debated and argued over.”

Holland also asked the senators to move quickly to pass the legislation, to avoid lending credence to Conservative critiques that the program is a fantasy.

When asked about the Liberals’ proposed pharmacare program for diabetes and birth control, Conservative Leader Pierre Poilievre has often responded that the program isn’t real. Once the legislation is passed, the minister must negotiate with every provincial government to actually administer the program, which could take many months.

“If we spend a long time wordsmithing and trying to make the legislation perfect, then the criticism that it’s not real starts to feel real for people, because they don’t actually get drugs, they don’t get an improvement in their life,” Holland told the committee.

He told the committee that one of the reasons he signed a preliminary deal with his counterpart in British Columbia was to help answer some of the Senate’s questions about how the program would work in practice.

The memorandum of understanding between Ottawa and B.C. lays out how to province will use funds from the pharmacare bill to expand on its existing public coverage of contraceptives to include hormone replacement therapy to treat menopausal symptoms.

The agreement isn’t binding, and Holland would still need to formalize talks with the province when and if the Senate passes the bill based on any changes the senators decide to make.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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Nova Scotia NDP accuse government of prioritizing landlord profits over renters

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HALIFAX – Nova Scotia’s NDP are accusing the government of prioritizing landlords over residents who need an affordable place to live, as the opposition party tables a bill aimed at addressing the housing crisis.

NDP Leader Claudia Chender took aim at the Progressive Conservatives Wednesday ahead of introducing two new housing bills, saying the government “seems to be more focused on helping wealthy developers than everyday families.”

The Minister of Service Nova Scotia has said the government’s own housing legislation will “balance” the needs of tenants and landlords by extending the five per cent cap on rent until the end of 2027. But critics have called the cap extension useless because it allows landlords to raise rents past five per cent on fixed-term leases as long as property owners sign with a new renter.

Chender said the rules around fixed-term leases give landlords the “financial incentive to evict,” resulting in more people pushed into homelessness. She also criticized the part of the government bill that will permit landlords to issue eviction notices after three days of unpaid rent instead of 15.

The Tories’ housing bill, she said, represents a “shocking admission from this government that they are more concerned with conversations around landlord profits … than they are about Nova Scotians who are trying to find a home they can afford.”

The premier’s office did not immediately respond to a request for comment.

Also included in the government’s new housing legislation are clearer conditions for landlords to end a tenancy, such as criminal behaviour, disturbing fellow tenants, repeated late rental payments and extraordinary damage to a unit. It will also prohibit tenants from subletting units for more than they are paying.

The first NDP bill tabled Wednesday would create a “homelessness task force” to gather data to try to prevent homelessness, and the second would set limits on evictions during the winter and for seniors who meet income eligibility requirements for social housing and have lived in the same home for more than 10 years.

The NDP has previously tabled legislation that would create a $500 tax credit for renters and tie rent control to housing units instead of the individual.

Earlier this week landlords defended the use of the contentious fixed-term leases, saying they need to have the option to raise rent higher than five per cent to maintain their properties and recoup costs. Landlord Yarviv Gadish, who manages three properties in the Halifax area, called the use of fixed-term leases “absolutely essential” in order to keep his apartments presentable and to get a return on his investment.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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